Tag Archives: special needs children

According to data from the Centers for Disease Control and Prevention (CDC), one in seven American children have some form of disability. Some suffer from behavioral and mental health issues. Others have developmental disabilities or congenital defects that severely impact their ability to care for themselves. Many of them could be at risk for issues in the future, once their parents are no longer around to care for them. Thankfully, estate planning offers parents a way to mitigate some of those risks. The following explains.

Choosing a Guardian for Your Child

If you know that your child will need lifelong care, it is critical that you create a will or estate plan and name at least two potential guardians to care for your child. The first can be the primary. The second can be someone who would assume care, should the first person pass away or be unable/unwilling to care for your child. You might also wish to set up an emergency care person – someone who would assume temporary care for your child, should you pass away suddenly. This can ensure they stay out of the state's care and in the care of someone you know and trust.

Developing a Trust Without Risking Disability

Until recently, families struggled to save money for their disabled child's future. Medicaid and Supplemental Security Income (SSI) had limits on how much cash reserve they could have saved, and exceeding that amount meant giving up a child's benefits. Thankfully, families now have access to a tax-deferred investment account that allows them to save up to $100,000 without jeopardizing their child's SSI benefits. Medicaid eligibility is never affected, no matter how much money is in the account. Known as an ABLE account, parents can also incorporate disbursements into their estate plan to ensure the money never interferes with eligibility and benefits.

Why an Estate Planning Attorney is Crucial

Although it is entirely possible to estate plan without an attorney, it is highly discouraged for all individuals. This goes doubly so for parents who have a child with disabilities. Careful and thoughtful solutions must be developed to reduce the risk of any interference with disability benefits. Further, there are many aspects that go into choosing a guardian and/or trust for your child.

Get the experienced and creative knowledge of Stock, Carlson, Oldfield & McGrath, LLC for your estate plan. Committed to your interest, our DuPage County estate planning lawyers will work to ensure your child's needs are met, long after you are gone. Learn more by scheduling a personalized consultation. Call us at 630-665-2500 today.

Special needs children often require expensive care and treatment, and parents may worry about who will care for their children in the event of an untimely death. Parents may even seek counsel from estate planning attorneys to determine their options and gain information regarding trusts for their children with special needs.

Special Needs Trusts — The Basics

Special needs trusts are established so that parents with special needs children can put money aside to be used for a child's care at a later date. Any funds in the trust are protected and will not impact the amount of money a disabled child or person receives from other sources such social security. Even though there may be thousands of dollars in a trust fund, the individual will still retain all rights to Medicaid for health insurance benefits.

Special Needs Trusts — Financial Security

If a trust fund is not set up in the name of a special needs individual, any monies that person receives can impact social security and Medicaid eligibility. In Illinois, a disabled person cannot have an income more than three times over the poverty level, or receive more than $2,000, and still receive supplemental security income or government health benefits. Once access to these resources has been cut off, an individual would have to re-apply to all programs and prove that he or she has no additional financial resources, therefore causing potential financial hardship. This problem can be eliminated by having a special needs trust fund set up in the individual's name.

Special Needs Trusts — Provisions

Individuals who are guardians of a child or children with special needs should consider making provisions for a supplemental needs trust in their wills. This will entitle a special needs individual to adequate financial provision upon the death of his or her caretaker. There are also options for setting up and paying into a special needs trust while a guardian is still living. If done properly, this will not affect a disabled individual's eligibility for government assistance.

A third option is to set up a special needs trust to hold significant amounts of money granted to the special needs child—inheritance paid out from the death of another relative, for example. This money can go into a trust that has been certified by a public court to ensure the special needs individual will still qualify for his or her other benefits.

For more information about how to establish a special needs trust for your child, please contact a DuPage County special needs trust attorney today to schedule a consultation. We are proud to be of service to Illinois families and we look forward to working with you.

Estate planning can be confusing with all the rules and laws to consider. But if you are a parent of a special needs child, estate planning can be even more complicated because of the worry over who will look out for your special needs adult child when you are gone. Also, the cost of care for a special needs child can be astronomical. For example, a study done by the University of Pennsylvania and the Children's Hospital of Philadelphia concluded that the lifetime cost for a person with autism that involves an intellectual disability is $2.4 million.

There are special considerations a parent has to address when estate planning. An adult child who receives Supplemental Security Income (SSI) and Medicaid benefits has a limit on the amount of financial resources they can have. Currently, a person on SSI cannot have more than $2,000 in liquid assets. The limits for Medicaid depends on the state in which the child lives.

However, parents can set up special trusts which will ensure the child will be taken care of, yet will not interfere with any benefits they receive. One type a parent can consider is called a testamentary trust and is often referred to as a third-party trust. This is a trust that is set up for the future, but does not have current funding.

Another option is a first-party trust. This is a trust that is set up using the special needs child's own funds, such as a gift or inheritance. One of the major differences between a third-party trust and a first-party trust is that upon the death of the special needs child, any money that is left in a first-party trust goes directly to the government for reimbursement of Medicaid expenses. With a third-party trust, there is no government payback and the person who originally set up the trust decides where the leftover funds go.

Estate planning for parents with special needs children can be complicated. However, an experienced DuPage County estate planning attorney can help guide you through the process to ensure your child will be taken care of in the event of your death. Call us today.